At the beginning of the millennium, when the so-called 1st compliance wave occurred, a document started to gain evidence: the Code of Conduct.
The Code of Conduct is the great backbone of any compliance program, as it must bring the expected standards of conduct for each employee, in addition to serving as a reference for decision making by managers. It is a document of maximum relevance in guiding the correct way to build results.
An organization’s Code of Ethics, on the other hand, is the document that must bring the mission – the purpose of a company’s existence, in addition to the vision – the perspective of what the company intends to achieve in the future and the corporate values - which must support the actions and their social role in the community.
Some organizations have unified these two concepts in a single document, such as, for example, Fundação Getúlio Vargas – FGV.
Despite the philosophical contrast in both definitions above, the important thing is that the organization´s final document brings the concepts listed in them, in order to create a solid basis to support the company’s compliance program and governance. The content of the code must be customized according to the business area and the culture that the organization intends to undertake from now on.
Starting the code with a message from the organization’s top manager is standard in the market as it reinforces the culture of the example and encourages everyone to follow their commander’s speech.
It is important to note that every Code of Conduct must emphasize the imperative need to comply with applicable laws and regulations.
As for the coverage of the code, it should apply to all employees without exception, in addition to trainees, interns, apprentices, volunteers or third parties with whom the company interacts with, whether providing services internally or in the commercial or institutional relationship, with vendors, customers or business partners. The company that gives up the values in its code to do some business, runs a high risk of doing something wrong … and possibly, will pay a high price for it.
The code must have a language that is easy to be understood, in addition to a structure that makes it easier for the readers to find what they are looking for. Therefore, any code without a summary tends to make it difficult to be consulted and to become less attractive to those seeking guidance.
Content dealing with anti-corruption, conflicts of interest, fair competition, harassment, accuracy in accounting books, confidentiality of information and company assets must be included in any code.
In addition, every Code of Conduct must have appropriate chapters to establish the disciplinary measures applicable in case of non-compliance with the rules besides clear guidelines for protection and non-retaliation for those who make a report in good faith about any violation or non-compliance act giving the company a chance to correct the problem. Therefore, the channels for reporting misconduct must be clearly identified.
The code becomes more attractive and effective in translating its message when it has inserts of practical examples through narratives in text boxes.
A well-written code is not enough, if those who should know its terms do not. Thus, employees, trainees, interns and outsourced workers must receive it in paper or digital format, read its content and certify their knowledge through a quick test. Due to the importance of this document, this certification should be annual.
In contracts with third parties, suppliers or customers, it is appropriate to have a contractual clause, in which the partner is obliged to know the Code of Conduct and adhere to its terms, when interacting with the company or representing its interests, under penalty of violation to the terms of the contract.
Considering the unforeseen circumstances that affect the business, every code should be revised from time to time, after all, many companies undergo significant changes in their business format over time. In view of the above, revisions every 3 or 5 years, for example, would be welcome to consider important characteristics which did not exist at the time the code was created.
For transnational companies, it is essential that the code is translated into the subsidiary´s native language of a given country. Languages can be a major barrier to fully understanding this document.